Business Law Report: English Legal System, Company Types, and Disputes

This report provides a comprehensive overview of business law, beginning with an introduction to the subject and its significance in regulating organizations. It delves into the English legal system, including its principles and the process of lawmaking. The report examines the distinction between employ...Read More

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................2
TASK 3............................................................................................................................................3
TASK 4............................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business law includes rules and laws which regulate working of an organization. A
business can run lawfully without any hindrance by abiding by applicable legislations. It has
other names as well which are mercantile law or commercial law (Clarkson, Miller and Cross,
2014). It does not involve any activities of criminal nature, therefore, it is made a part of civil
law. It regulates many areas such as bankruptcy, partnership, company etc. In this report, prime
principles of legal system together with process of making a law, sources of law, difference
between an employed and self-employed through a benchmark case has been discussed.
Furthermore, different types of organizations by putting focus on registered company and
solutions for legal disputes have also been provided.
TASK 1
In this case, Kango is a partnership firm formed by Jay and Alex in 2016 for home
delivery of meals. The location where it is situated is one of the finest places in London and it
was making profit in initial stage resulting into expansion of business into other localities.
However, it has failed in conducting its business quite a few times due to which has effect till
this date therefore, it believes that knowledge of law will remove the hardship.
English legal system is one of the branches of legal system exist in United Kingdom. It
has been used as a foundation for laying legal structure in other countries. There are rules and
laws in this system which are applicable throughout UK and every individual and organizations
are under a duty to follow each one of them. Parliament is sovereign is the main principle in the
country. This states that, the highest authority to makes laws or amend them is with Westminster
Parliament and no one can challenge the validity of it. The decisions of every court is below the
order or judgement made by the Parliament (.Baker, 2019).
English legal system is a well defined system which comprises many different laws and
rules. The system has evolved with the time and has undergone drastic alterations. However,
there is a huge requirement of further reforms for making it better and effective. In other words,
UK's legal system has failed to work appropriately which made it clear that there is a huge scope
of improvement. All the defaults can be made good by introducing laws and rules which should
be gone through the bill passing procedure. The process is as follows:
 First reading: In this, a bill is put before the members of the Parliament.
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 Second reading: A discussion is held for the bill and votes are taken for deciding on the
bill.
 Committee stage: The bill so voted is forwarded to standing committee for examination
and review.
 Report stage: The conclusion so made by the committee is presented in report form
which is given to House of Commons for further discussion (Bill passing process, 2019).
 Third reading: No amendments is possible at this stage, but with the consent of both the
parties, amendments can be made.
 Royal assent: Last stage requires assent of the queen to pass a bill and implement it as a
law.
An organization needs to be updated and know well in advance all the legislations,
regulations and standards applicable on it, thus, for this purpose it can take help from various
sources which are as follows:
Primary sources are the first hand information which is stored in original form. These
are available in the form of case law, legislation and EU directives. Apart from this, secondary
sources which are legal encyclopaedias, law journals, law commission, parliamentary and non-
parliamentary publications etc. can be used.
TASK 2
In the past few years, it has been seen that self-employed workers often felt that they
should be treated as employees only due to number of reasons. Therefore, a landmark case of
Pimlico Plumbers took place which was a huge relief for huge number of self-employed workers.
In the case of Pimlico Plumbers v. Gary Smith, Smith was a self-employed worker working in
the company for past 6 years. The literal meaning and in legal sense, a person working as a
freelancer is called self-employed as he/she is not bound by any restrictions or policies of the
organization. Also, there is no such limitation that such person can not switch jobs. However, in
this case scenario, Gary filed a case against Pimlico in Employment court on the basis that he
and other self-employed workers in Pimlico should be treated as employees (Pimlico Plumbers
case, 2019).
Gary was aggrieved with the decision so passed, thus he appealed in appellate tribunal
which also passed a judgement against Gary. This made him approach Supreme Court with the
same allegation. Supreme Court passed the decision in favour of Gary by mentioning that, if a
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self-employed person is imposed administrative control and made to follow code of conduct of
company then such person will be treated as an employee. In the case of Pimlico, Gary and other
self-employed workers were made to wear the uniform and drive the vans carrying brand name
of Pimlico. Also, they has no choice of switching the job and join other employer operating in
the same business because of rivalry. All these conditions can be put on an employee only for
whose appointment an employment contract is executed. A self-employed is free do work as per
his choice and wish. No one can put any restrictions or impose any rules and regulations.
When an employee is appointed, he or she should be treated as an employee according to
the definition so provided in Employment Rights Act, 2002 or Equality Act, 2010 or any other
act which is related to regulating employees. Their rights should be protected and they should get
all the leaves, salary, incentives, bonus, other perquisites of being employees.
Distinction between a self-employed and employed
Employed Self-employed
Tax should be paid as mentioned in the act
which is generally high.
Less tax on the income earned.
Leaves can be taken which are prescribed in
the contract (Difference between employed and
self-employed, 2019).
One can take many holidays.
Employees have to follow instructions of his
employer.
Flexibility in work.
TASK 3
Limited company: A company is an artificial person in the eyes of law having a separate
legal identity which is different from its members. A company can be limited by shares or
guarantee, which means that, shareholders are required to pay only that amount which is unpaid
or guaranteed in the MOA, respectively. Furthermore, a corporate has perpetual succession and
common seal and can own properties, open account, or make contracts in its own name (Jelsma,
and Nollkamper, 2017). It is required to get registered under Companies Act, 2006 for getting all
the privileges of a company. Also, there are wider sources to raise funds from. However, there
are other types of business organizations available which are as follows:
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Sole proprietorship: It is a business whose administration is in the hands of a single
person who is called as sole proprietor. There is no separate legal entity and also registration is
not necessary. Profit and losses are earned or borne by owner himself. Furthermore, it is easy to
form and dissolve. Also, decision making power is exercised by sole proprietor. However, it can
does not have many options to raise funds because investors do not show much interest in this
type.
Partnership firm: It is an association which is established by at least 2 persons who are
known as partners. A partnership deed is executed between them which comprises terms and
conditions governing the business. A partner will be held liable severally and jointly for the acts
of other partners. Every decisions made in the business will be implemented only when it is
approved by all the partners (Kaya and Vereshchagina, 2014). The sources that are available to it
for raising finance are loan from banks and financial institutions, venture capital, contribution by
partners etc.
Limited Liability Partnership (LLP): It is a mixed form of a company and partnership
firm where by partners get the chance to have flexibility in operations and limited liability just
like shareholders. It is suitable for professionals like company secretaries, lawyers etc. They are
at better position in raising fund from the sources like crowd funding, bank and financial
institution loans, contribution of partners etc.
Company is an appropriate form to start a business. Features like separate legal entity
with perpetual succession and authority to enter into contracts, acquire properties and many more
things can be done only when a company is registered. When a company gets the status of a
registered company, it can raise funds easily from different sources. The reason being is that
investors trust a registered company more than an unregistered company.
TASK 4
Dispute resolution solutions are meant to provide a remedy which can be applied in
disputes and conflicts without going to courts or tribunals. Litigation is an expensive and time
consuming process which should be used as a last resort. In order to get a solution for the
settlement of problems, the following methods can be used:
Negotiation: This method should be given the first preference in resolving the problem. In this,
existing terms and conditions are adjusted according to need of the situation. It involves a two
way communication between parties to dispute whereby a conclusion is figured mutually. It is
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voluntary in nature in which formalities are very less. This method is suitable for resolving
conflicts arising between two companies in the event of merger or amalgamation. Whereby,
shareholders of both the companies can alter their terms in which they will be allotted shares
(Goldberg, and et. al., 2014).
Mediation: This method is applied when negotiation fails to provide a required solution which is
appropriate to the circumstances. In this, a third party is appointed who assist the parties to have
a communication. In this, arguments of both the parties are put in front of each other which helps
in understanding the matter more clearly. It is again simple, voluntary in nature. Also, there is no
hard and fast rules which makes it convenient to use. Mediator facilitates two way
communication but does not make any decision as he/she does not have such authority. This is
suitable in resolving family problems. It can prove to be an effective way of reaching a
conclusion but since, parties often fail to settle the problem.
Arbitration: In this solution, a third party who is impartial and independent of everything is
appointed with mutual consent. Such person is called arbitrator who is responsible for hearing
arguments of both sides. Further, the parties to dispute are required to provide evidence,
testimonies and documents which can prove their points. After investigating all of the above-
mentioned things, arbitrator makes a judgement which the parties are bound to abide by as it is
final and binding. This method is cheap, speedy and provides a solution which can be relied upon
for the settlement of conflict.
K can use arbitration which is an effective and useful method for settling the dispute
promptly. This can give the desired solution by which all the activities can be sorted out. This
will save time and cost which can be applied in something more productive. Also, it is easy to
use and the procedure can be made according to situation.
CONCLUSION
From the above report, it has been concluded that the scope of business law is huge in
which many set of rules and laws are included which are applied to different areas and fields.
Different sources of law can be used to extract required information about legal system of a
country. Furthermore, a bill has to be passed through fixed process which is given in the
constitution otherwise no law can be implemented. Along with this, a self-employed should be
treated as freelancer only and no instructions should be imposed on them which would transform
the definition of employees. In addition to this, all the available types of business organizations
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should be analysed before establishing it and since, there is a tendency that problems may arise,
legal solutions should also be known.
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